Online Poker Seizures: Judge Could Unseal Portions of Warrants

Written by:
C Costigan
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Judge Laura Taylor Swain heard arguments Monday morning regarding Costigan Media's Motion to Intervene and have seizure warrants unsealed in a cased involving the seizure of around $40 million in online poker funds.  Costigan Media is the parent company of Gambling911.com.

Judge Swain believed that portions of the warrants should be sealed, however, requested that the US Government provide her with compelling arguments for why the entire warrants should remain sealed.  Judge Swait was particularly interested in the history of warrants, which have historically been unsealed after their execution. 

The Judge, accompanied by a court reporter, spoke to the three Government prosecutors behind closed door for up to an hour.

She has ordered all transcripts be provided to the Court by week's end in order that she may render a decision some time next week.

Should the warrants become unsealed, names of cooperating individuals are likely to be redacted.

The U.S. attorney for the Southern District of New York instructed three banks to freeze the accounts associated with online poker's two largest companies, PokerStars and Full Tilt Poker, in early June and another to do so on June 24.  A letter faxed to one bank, Alliance Bank of Arizona, claimed that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses." The letter was signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York.

The US Government responded to Costigan Media's Motion last Monday, implying strongly that more seizures of funds were anticipated. 

"Under these circumstances, granting Costigan's Motion would be unprecedented," the Government argues.

"Indeed while Costigan's brief cites dozens of decisions from various jurisdictions that support its arguments, it has not cited a single decision in any federal court granting a motion to unseal a seizure warrant affidavit while a criminal investigation is ongoing.

"Unsealing a seizure warrant application during the course of a related criminal investigation is unprecedented because neither the media nor the public have a right to access such documents."

Costigan Media is represented by Baruch Weiss of Arent Fox.

Christopher Costigan, Gambling911.com Publisher 

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